The Vancouver City Council on Monday praised City Manager Eric Holmes and gave him a 1.5 percent pay increase, equivalent to what all non-represented city employees earned for 2013.

The pay increase will be retroactive to Jan. 1, said Vancouver Mayor Tim Leavitt.

"We are extremely pleased with the performance of our city manager," Leavitt said. Measured by both quantitative and qualitative standards, Holmes was rated an 8.8 out of a possible 10, a half-point improvement from his last evaluation, which was in December 2011. At that time, he was given a 3.5 percent raise.

Monday's raise boosts Holmes' salary to $169,659, plus benefits.

Holmes, the only staff member the city council can set compensation for and hire or fire, was promoted from assistant city manager in October 2010.

Councilor Bill Turlay, who was not yet on the council, recalls urging the council to hire Holmes and not spend thousands of dollars on a nationwide search.

"I recognized you were a talent in-house," Turlay said. "I'm extremely proud to have been one of your earliest supporters." He thanked Holmes for helping him get off to a running start his first year on the council by setting up individual meetings for him with department leaders.

Councilor Jeanne Stewart commended Holmes for recognizing pending financial woes early and stressing the need to track spending habits long-term. She said he helped keep the city out of a financial crisis and said his "dogged attention and reminders" have helped the council make smarter decisions.

Stewart and other councilors also praised Holmes for leading the city through difficult times, including layoffs. He's also had to take on additional workloads after losing department leaders including a police chief, a human resources director and a parks and recreation director.

Before the meeting, Leavitt said the loss of top directors has meant Holmes had to work harder to make sure council policies are implemented in those departments while he waits for the positions to be filled.

"He's carrying a lot of extra responsibility," Leavitt said.

The one thing for which Holmes was publicly scolded? Not taking enough vacation. Possibly because he's been without top city managers, he's accumulated so much paid time off that the council will allow him to sell back 160 hours this year instead of the typical 80 hours.

"You need to take your vacation time," Councilor Jeanne Harris said.

Holmes, 43, was also given a break on when he will have to adhere to a rule that the city manager must live within the city limits.

Holmes and his family live in Vancouver's urban growth area but in the North Salmon Creek neighborhood, north of city limits. The assessed value of their home has dropped nearly 23 percent from the 2005 purchase price, and Leavitt said he and the council felt it was appropriate given the housing market that they allow Holmes more time to move into the city because they don't want to force him to sell at such a big loss.

Leavitt said Holmes will be asked to move when the assessed value reaches 90 percent of the purchase price.